SYDNEY, June 30 (Xinhua) -- Global giant Rio Tinto Ltd has pulled out of its quarter century gold and copper project in Papua New Guinea's Bougainville after a two-year review into the long dormant mine.
Rio had been reviewing its controlling stake in Bougainville Copper Ltd since a mining law was passed by the autonomous Bougainville government in 2014 that converted it's mining lease at the dormant Panguna gold and copper mine to an exploration licence.
Rio's 53.8 percent holding in Bougainville Copper will now be split between the Autonomous Bougainville Government (ABG) and the Papua New Guinea (PNG) government, with each gaining an equal 36.4 percent stake in Bougainville Copper. Rio will receive no compensation despite the shares being worth up to 40 million Australian dollars (29.81 million U.S. dollars).
"Our review looked at a broad range of options, and by distributing our shares in this way, we aim to provide landowners, those closest to the mine, and all the people of Bougainville a greater say in the future of Panguna," Rio Tinto copper and coal chief Chris Salisbury said in a statement.
"The ultimate distribution of our shares also provides a platform for the ABG and PNG Government to work together on future options for the resource."
Panguna mine was a significant producer until production was halted in 1989 at the outbreak of a decade long civil war that ended with an autonomous Bougainville government. Bougainville Copper had been looking to restart operations if approved by the autonomous government.
The Panguna mine is believed to still hold 5.3 million tonnes of copper and 19.3 million ounces of gold deposits, but it could cost up to 10 billion Australian dollars (7.45 billion U.S. dollars) to restart operations. The mine has already produced over three million tones of copper and 9.3 million ounces of gold over its 17-year operation prior to its halting.
By 1148 local time (AEST) on Thursday, Bougainville Copper's shares had surged 40 percent to 28 Australian cents (20.86 U.S. cents), while blue chip Rio Tinto was up 44 Australian cents (32.79 U.S. cents), or 0.98 percent to 45.27 Australian dollars (3.73 U.S. dollars) in a strong market.
